12 CFR § 1026.38(p)(1) states:
“For transactions subject to 15 U.S.C. 1639h or 1691(e), as implemented in this part or Regulation B, 12 CFR part 1002, respectively, under the subheading “Appraisal,” that:
i. If there was an appraisal of the property in connection with the loan, the creditor is required to provide the consumer with a copy at no additional cost to the consumer at least three days prior to consummation; and
ii. If the consumer has not yet received a copy of the appraisal, the consumer should contact the creditor using the information disclosed pursuant to paragraph (r) of this section.”
Ibid. § 1026.37(m)(1) contains similar instructions for the Loan Estimate. However, the Official Interpretations to both 37(m)(1) and 38(p)(1) instruct that, if a transaction is not subject to 15 USC 1639h or 1691(e), the Appraisal disclosure required may be omitted. Accordingly, the document logic on the Loan Estimate removes the Appraisal disclosure if the loan is not for a first lien or for a Higher-Risk HPML. However, this same logic was not duplicated on the Closing Disclosure because of the permissive language of the paragraph removal (“…may be left blank…”).
After conversing with some of our clients about their preferences, we will be adding the same Appraisal paragraph logic to the Closing Disclosure that we presently have on the Loan Estimate. Any custom logic for triggering the Appraisal paragraph will be left in place. This change will be applied to both the Closing Disclosure (Cx18566) and the Spanish Closing Disclosure (Cx18991).
This change will be in effect on August 17, 2017. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.